Published 4:00 am, Wednesday, March 1, 2000

2000-03-01 04:00:00 PDT San Francisco -- Tower Air, a no-frills airline offering cheap international flights, created untold headaches for travelers yesterday when it filed for bankruptcy.

The New York-based carrier abruptly canceled its twice-weekly flights between San Francisco and New York but vowed to continue flights to Los Angeles, Paris and other major cities.

The airline hopes to regain its financial footing with an $18 million loan secured from GMAC Business Credit, an affiliate of General Motors. But the infusion did not help customers who found themselves stranded at San Francisco International Airport last night.

"They gave me absolutely no options," said Frank Jackson, a 31-year- old businessman from New York who spent hours searching for another flight home. "I've never dealt with such ignorance."

Jackson learned of the cancellation late Monday night after checking his departure time. He was not the only customer left fuming.

Many irate customers posted long rants last night on a Web site devoted to airline horror stories.

"Looks like (Tower CEO Morris) Nachtomi has finally . . . run his airline nose-first into the ground!" one anonymous critic said on the Web site. Tower officials could not be reached for comment last night, and calls to the airline's reservation hotline were not answered. It remains unclear whether customers holding unused tickets will receive refunds.

Several major airlines, including TWA, United, American and Delta, said they will not honor Tower tickets.

The tiny airline, with 14 Boeing 747 passenger jetliners, was founded in 1982. It offers rock-bottom fares -- $109 for a one-way ticket from New York to Los Angeles, for example -- to destinations such as Athens, Paris and Tel Aviv.

Tower has wrestled with labor and fiscal woes in recent years. Last month, it started laying off 300 employees, and with yesterday's announcement came word that the airline was halting service to Fort Lauderdale, as well as San Francisco, and cutting back flights to Los Angeles and Puerto Rico.

Nachtomi, the airline's chief executive, issued a statement saying the airline had "left no stone unturned in trying to avoid Chapter 11." He gave no details about why Tower was seeking protection from creditors.

Industry analysts believe Tower Air is short of cash because it is poorly run and offers cut-rate fares to fill its jetliners. Tower has been plagued by chronic delays and has angered so many of its customers that there are two Web sites devoted to complaints about the airline.

Tower has $380.7 million in assets and $356.8 million in debts, according to documents filed yesterday in U.S. Bankruptcy Court in Wilmington, Del.

The airline has a long list of creditors awaiting payment, including San Francisco airport. Wilson said Tower owes the airport about $80,000 in landing fees, security costs and other expenses.